Short Term Bad Increase In Reserve Cotton Prices Fell Again

Last week (August 2019 5-9) was the fourteenth week of the central reserve cotton mill in 2019. China Cotton Reserve Management Co., Ltd. sold 49 thousand and 500 tons of central reserve cotton, including 18 thousand and 600 tons of Xinjiang cotton and 30 thousand and 900 tons of real estate cotton.

In the week, the average price of the central reserve cotton was 12020 yuan / ton, down 462 yuan / ton compared with the previous week, and the price of the standard grade (3128B) was 13554 yuan / ton, down 201 yuan / ton compared with the previous week. The average price of Xinjiang cotton was 12165 yuan / ton, 483 yuan / ton less than the previous week, and the price of 3128B was 13460 yuan / ton, compared with the previous week, it dropped 47 yuan / ton, the average increase price was 169 yuan / ton, the average price increased by 438 yuan / ton compared with the previous week, the average price of real estate cotton was 11857 yuan / ton, which was 455 yuan / ton lower than the previous week, and the price of 3128B was 13658 yuan / ton. In the week, the highest price of the central reserve cotton was 12780 yuan / ton, and the lowest transaction price was 11350 yuan / ton.

Affected by the continued escalation of Sino US trade war, market fear of tariff increases has surged. Last Monday (August 5th), some of the contracts for Zheng cotton futures were down, and the main contract CF1909 in August 8th hit a new low since June 2016. The auction price of cotton spot and reserve cotton has declined. After stacking, the order is insufficient and inventory pressure is increased. Textile enterprises' demand for cotton raw materials has declined. According to investigation and study, under the circumstances of unclear Sino US trade consultation, it is an indisputable fact that yarn stock increases in spinning enterprises. However, some textile enterprises in Jiangsu and Shandong still maintain high rate of opening up, and most enterprises also express their confidence in the future.

It should not be overlooked that in September cotton harvest season approached, and the time of repayment of the cotton ginning factory was coming. The United States originally planned to levy 10% tariffs on China's $300 billion export to the United States in September. There is still uncertainty about the possibility of landing.